NRIs Cannot Invest in Company Fixed Deposit Through NRE Account?

Planning

oi-Sunil

By Sunil Fernandes

Published: Monday, November 17, 2014, 11:20 [IST]

Non Resident Indians cannot invest in a company fixed deposit through the NRE Account. In fact, NRIs can invest in company deposits provided the principal and interest amount would not be credited to a Non Resident External (NRE) account.

Fixed Deposit Applications have this to read on the application form: "The amount deposited with XYZ Company represents amounts transferred from NRO Account. Further, the amount does not represent inward remittance from Overseas to NRO account or transfer of funds from NRE/FCNR (B) account to NRO accounts."

What this means is that if you have remitted money into your NRO account through an NRE account or from abroad you cannot use the same for investing in a company fixed deposit. Ditto for a Foreign Currency Account. Moreover, the amount that are received from the deposits are non repatriable, which means you cannot transfer the money back abroad.

The only option left is to invest in company fixed deposits through the NRO accounts.

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